Company Number: 12949325

Analysis Date: 2025-07-29 15:07 UTC

1. Risk Rating: HIGH
   The company exhibits a significant negative net asset position (£-69,639) and persistent net current liabilities, indicating solvency concerns. The large long-term creditor balance relative to fixed assets and low cash reserves further exacerbate liquidity risk.

2. Key Concerns:

• Negative Shareholders’ Funds: The company has an accumulated deficit in the profit and loss reserve, increasing from £-46,770 in 2022 to £-69,640 in 2023, demonstrating ongoing losses or write-downs eroding equity.
• High Long-Term Liabilities: Creditors due after one year stand at £398,720 against fixed assets of £334,746, suggesting potential over-leverage and risk of inability to repay debts without asset disposals or refinancing.
• Director Loan Account: The director has a substantial negative loan balance with the company (£195,595), which may reflect related party transactions requiring scrutiny for financial stability and governance.

3. Positive Indicators:

• Compliance with Filings: The company’s accounts and confirmation statement are up to date with no overdue filings, indicating regulatory compliance.
• Investment in Real Estate: The major fixed asset is a stable investment property valued at £333,967 with no impairment, signifying an underlying asset base that may provide future value or collateral.
• Continuity of Directorship: A single director, appointed since inception, provides consistent leadership, which may support operational stability in the short term.

4. Due Diligence Notes:

• Examine the terms and conditions of the long-term creditors, including bank loans and other creditors, to assess repayment schedules, interest rates, and covenants.
• Review the director loan account transactions and related party disclosures to understand their impact on the company’s financial position and whether these loans are repayable or convertible.
• Investigate cash flow forecasts and business plans to determine how the company intends to address the negative net assets and working capital deficit.
• Consider the valuation method and market conditions for the investment property to ensure the carrying amount reflects fair value and is realizable.
• Evaluate any contingent liabilities or off-balance sheet obligations not disclosed in the filleted accounts.